How high interest rates equal less land entitlements and permitting

EandP — Mon, 04 Sep 2023 00:29:07 +0000

Introduction

Hey, let’s talk money and land! You might be scratching your head about what high interest rates have to do with land entitlements and permitting. Well, stay with me because understanding this relationship could save you time and money in the long run.

The Basics of Interest Rates

First off, what are interest rates? Simply put, it’s the cost of borrowing money or the return you get on your savings. Rates go up and down like a roller coaster, and these fluctuations can have a big impact on various sectors, including real estate.

Land Entitlements Explained

So, what are land entitlements? Imagine you’ve bought a piece of land. Having that land is one thing, but being legally allowed to develop it is another. Entitlements are the approvals you need from the government to go ahead with your development plans.

Permitting: The Other Side of the Coin

Let’s not forget about permitting. Think of this as the series of “yeses” you need after land entitlements, which usually include a host of inspections and validations.

The Interconnectedness of Interest Rates, Entitlements, and Permits

The common thread? Money. To get those entitlements and permits, you’ll often need to borrow money. Here’s where interest rates make their grand entrance. The higher the interest rate, the more expensive it is to borrow money, affecting your bottom line.

How High Interest Rates Affect Land Entitlements

Imagine needing a loan for your project. High interest rates can make banks and other financiers think twice about lending. Fewer loans mean fewer projects get the green light, leading to slower growth in land development.

How High Interest Rates Impact Permits

When interest rates skyrocket, even the cost of securing permits can become a burden. And let’s not forget, time is money. Delays in securing finances can lead to delays in getting permits, and that’s bad news for everyone.

Real World Examples

Let’s look at two case studies. In Case Study 1, a developer faced increased interest rates, leading to stalled projects and financial strain. In Case Study 2, another developer managed to navigate high rates successfully by employing smart strategies.

The Ripple Effect on the Economy

The consequences don’t stop with you or a single developer. High interest rates slow down development, which has a ripple effect on the economy. Slower development means fewer jobs, less economic activity, and ultimately, fewer opportunities.

Mitigating the Impact of High Interest Rates

So, what’s the game plan? Strategic planning and seeking alternative financing options can be lifesavers. Sometimes, a different type of loan or a different lender can make all the difference.

The Role of Policy

It’s not just about you or me; it’s a societal issue. Government and central banks can play a role in regulating interest rates to maintain economic balance.

The Flip Side: Low Interest Rates

Low interest rates aren’t always the hero we think they are. They can lead to inflation and other issues. But hey, that’s a topic for another day.

Making Smart Choices in a High-Interest Rate Environment

In a high-interest environment, planning is your best friend. Diversify your financing options and keep an eye out for the best deals. Be prepared for delays and have a contingency plan.

Conclusion

High interest rates can be a thorn in the side of land entitlements and permitting. But knowledge is power. By understanding the relationship and planning accordingly, you can mitigate risks and make smarter decisions.

Contact us now and our expert staff will help you.

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AB 2097: Parking Requirements Near Public Transit

EandP — Mon, 21 Aug 2023 03:54:31 +0000

Introduction: The Planning and Zoning Law has long been a guiding force for the physical development of cities and counties. It mandates a comprehensive plan for development, including land use and conservation elements. One of the aspects of this law pertains to parking requirements for various development types. AB 2097, introduced by Friedman, seeks to make significant changes to these requirements, especially for developments near public transit.

Key Provisions of AB 2097:

Elimination of Minimum Parking Requirements Near Public Transit: The bill proposes that public agencies should not impose any minimum automobile parking requirement for residential, commercial, or other development projects located within half a mile of public transit.
Exceptions to the Rule: While the bill largely prohibits parking requirements near public transit, it does allow for exceptions. A city or county can enforce parking requirements if they can provide evidence that not doing so would negatively impact their ability to meet housing needs or affect existing parking within half a mile of the development. However, there are further exceptions to this:
- If the housing development dedicates at least 20% of its units to very low, low-, or moderate-income households, students, the elderly, or persons with disabilities.
- If the housing development contains fewer than 20 units.
- If the housing development is subject to parking reductions based on other laws.
Protection for Electric Vehicle and Disability Parking: The bill ensures that developments near public transit still need to provide parking spaces for electric vehicles and those accessible to persons with disabilities.
Enforcement and Accountability: The Department of Housing and Community Development will notify any city or county in violation of these new parking requirements. Furthermore, the Attorney General has the authority to bring an action against any jurisdiction that violates these provisions.
Statewide Concern: The bill emphasizes that these changes address statewide concerns and will apply to all cities, including charter cities.
Reimbursement Provisions: The California Constitution mandates the state to reimburse local agencies for certain state-imposed costs. However, this bill states that no reimbursement is required for reasons specified within the act.

Conclusion:

AB 2097, Friedman, is a significant step towards reimagining urban planning, especially in the context of promoting public transit. By reducing parking requirements near transit hubs, the bill aims to encourage more people to use public transport, thereby reducing traffic congestion and promoting sustainable living. However, it also ensures that the needs of specific groups, like the elderly, low-income households, and persons with disabilities, are taken into account. As cities grow and evolve, such measures can play a crucial role in shaping a more sustainable and inclusive urban landscape.